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America's most recession-proof cities

By Annalyn Censky, staff reporterSeptember 16, 2010: 5:03 AM ET

NEW YORK (CNNMoney.com) -- When it comes to recession-proof cities,"the Big O" is still on top.

Of the strongest-performing cities during the recession, Omaha, Neb. had the lowest unemployment rate -- a mere 5.5% in June, compared to a whopping 9.5% for the country overall -- and the lowest change in unemployment over the last three years.

So it's no surprise that Warren Buffett's hometown made the top 20 list of the strongest-performing metro areas according to MetroMonitor, a quarterly report released Wednesday by Brookings Institute's Metropolitan Policy Program.

Overall, the reading on local economies is still grim though, as home prices continue to fall and unemployment rates remain historically high, the report said.

The list of strongest-performing areas included several middle American cities that were boosted by an uptick in manufacturing jobs and home price declines that were more modest than in other parts of the nation. The weakest performers were mostly sunbelt cities which saw some of the largest declines in home prices and continue to lag behind the rest of the country.

"While most large metropolitan areas saw growth in output and jobs in the second quarter, it's far too early to open the champagne. The good news isn't all that good," said Howard Wial, a Fellow with the Brookings Metropolitan Policy Program said in a release. "We are nowhere near where we were prior to this recession."

The best: The 20 strongest-performing metro areas received high rankings for keeping their labor and housing markets stable and posting robust economic activity during the past few years. The latest list includes employment and home prices data through the second quarter of 2010.

Midwestern cities including Madison, Wis., Oklahoma City and Des Moines, Ia. also topped the list, as did six Texas cities, because housing prices held up better there than in other regions of the country.

Kansas City, Mo. was the only newcomer to the top 20, after its gross metropolitan product -- a broad measure of economic activity -- not only recouped its losses from the recession, but increased 2.6% since the height of the downturn.

Overall, 41 metropolitan areas recovered their pre-recession levels of output, with Washington D.C. leading the way with a 6.9% boost in output, according to the MetroMonitor report.

The worst: The 20 weakest-performing cities included Las Vegas, which saw a 9.9% surge in unemployment over the last three years. The "Sin City" had a 14.6% unemployment rate in June 2010, up from 4.7% in June 2007.

California and Florida cities were also at the bottom of the list, as their home prices continue to fall, although not as rapidly as during the height of the recession. Home prices in Cape Coral, Fla., Modesto, Calif. and Stockton, Calif. are still struggling to gain traction after plummeting more than 55%.